Important and/or distinctive aspects of annual leave legislation in China
Accumulated working years: The statutory minimum annual leave entitlement is based on an employee’s accumulated working years, i.e. the total number of full years they have worked, irrespective of their employer(s) during that period.
Annual leave compensation: Generally annual leave must be used within the calendar year in which it accrues. If the employee cannot use it fully within the year for reasons beyond the employee's control, the employer must compensate the employee at the rate of 200% of daily salary per day of untaken leave. Carrying over any untaken annual leave to the next year is subject to the consent of the employee; if consent is given, annual leave compensation is not required.
Compensation for untaken leave is calculated in a different way to ordinary annual leave pay. Compensation is calculated as 200% of daily salary (not base salary). "Daily salary" is calculated based on an employee’s average monthly remuneration including salary, bonus, commission and other allowances (excluding any overtime pay) over the previous 12 months.
If the employer arranges for the employee to take annual leave but the employee refuses, the employer is not obliged to pay the additional compensation but will need to evidence this in writing.
Contractual annual leave and compensation: Unless otherwise provided by an employer's internal rules, the above compensation requirements apply to an employee’s total annual leave entitlement (i.e. including any additional contractual leave), so it would be advisable for employers to carve out contractual leave in their internal rules.